Discovery-Leveraged Investment in Gold Nov ovember 2 r 2018 18 - - PowerPoint PPT Presentation

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Discovery-Leveraged Investment in Gold Nov ovember 2 r 2018 18 - - PowerPoint PPT Presentation

For personal use only Discovery-Leveraged Investment in Gold Nov ovember 2 r 2018 18 AGM U Update te DG DGO C Corporate Ove verview ew For personal use only Boa oard of of Di Director ors Mana nagem emen ent Shares 24.9 m


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SLIDE 1

Discovery-Leveraged Investment in Gold

Nov

  • vember 2

r 2018 18 AGM U Update te

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SLIDE 2

Shares

DG DGO C Corporate Ove verview ew

Bruce Parncutt

Non-Executive Director 7 Majo jor S Shareh eholders

Boa

  • ard of
  • f Di

Director

  • rs

Eduard Eshuys

Executive Chairman

Dr Darryl Clark

Managing Director

24.9m Share P Price 61c Marke ket Capit italis lisation $15.1m Cas Cash (30

30th Sept)

$3.2m

Board 84% 24%

Michael Ilett

Non-Executive Director

Ross Hutton

Non-Executive Director

Mana nagem emen ent

Cindie Jupp

Chief Financial Officer

Dr Darryl Clark

Managing Director

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SLIDE 3

DGO’s purpose

To provide an

  • utstanding
  • pportunity for

investors to participate in a discovery-leveraged investment in gold. To apply expertise and disciplined allocation

  • f capital to maximise

returns for shareholders in the gold sector. To build on the successful history of the WA gold industry and to lead the cost effective discovery of gold resources underpinning substantial future growth.

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SLIDE 4

DGO strongly differentiates itself by identifying large scale gold discovery

  • pportunities that meet three key selection criteria:

DGO DGO’s S s Strateg egy

Brownfield gold resource discovery opportunities where finding costs are assessed to be comfortably below the brownfield average of $20 per resource ounce. Initial resource potential of greater than 3 million ounces as a base line required to support successful development.

Potential for long term resource growth, well beyond 3 million ounces. Potential for upside surprise via either a world class discovery (+10 million ounces) or substantial high grade mineralization.

1 2 3

Low finding cost Potential for scale Optionality to the upside

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SLIDE 5

Gold h historically a a proven hedge a against e economic a c and financial t turmoil

0.00 500.00 1000.00 1500.00 2000.00 2500.00

1910 1930 1950 1970 1990 2010

Gold Prices and Historic Events

instability WW1 WW2 Great Depression Oil Crisis Middle- Eastern wars September 11 GFC

forecast

Nominal Value Inflation Adjusted Value

US$/Oz

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SLIDE 6

Australia is the 2nd largest producer of gold in the world

Millions of Ounces

5 10 15 20 25 30 35

1970 1979 1987 1996 2014 2017

S Africa USA Australia Canada China Australia

2nd largest producer

Gold Uses

Jewelry

47%

Dental - Me Medic ical

0.6%

Elect ctronics cs

7.1%

Ce Central Ba Bank Reser erves es

8.7%

Equity T Traded Fund Funds

12%

Co Coin & Ba & Bars / / Investments

24%

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SLIDE 7

500 1,000 1,500 2,000 2,500 2 4 6 8 10 12

1851 1858 1865 1872 1879 1886 1893 1900 1907 1914 1921 1928 1935 1942 1949 1956 1963 1970 1977 1984 1991 1998 2005 2012

Western Australia Australia Adjusted gold price

Western Australia is Australia’s major gold producing state

  • Substanti

tial k known wn go gold bearing s g structural t tren ends that h t have not b t been een adequatel ely e explored ed

  • Wel

ell e established ed infrastructure & e & low sover erei eign gn r risk

  • A strong p

g pool o

  • f

explorati tion, d dev evel elopmen ent and m mining c g capabilities es.

Millions of Ounces

Production increased due to improved discovery technology

Adjusted Gold Price Australian Gold Production

Western Australia has:

Gold Price

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SLIDE 8

DGO Gold’s

  • bjective is to

build a portfolio of WA brownfield discovery

  • pportunities

Corp

  • rpor
  • rate O

Object ctive

primarily through strategic equity investment Individual portfolio investments can realistically be anticipated to return 30% to 100% IRR’s based on successful ASX listed brownfield discovery and development

  • utcomes over the

past five years. and also through tenement acquisitions and joint ventures

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SLIDE 9

Brownfield discovery finding costs have averaged $20 per resource ounce and generate venture capital type IRR’s over a 3 to 5 year time frame

DGO Gold defines brownfield exploration as that

  • ccurring adjacent

to known economic gold mineralisation where the geological controls and settings are understood.

Company ASX Period

  • Expl. Costs

$m Res. Discovered Moz Resource Finding Cost $/oz IRR % Northern Star NST Over 3 years to Oct 2018 150.0 7.1 21 59 Dacian Gold DCN From IPO to Jul 2016 55.0 2.5 22 71 Kin Mining KIN From IPO to Jul 2016 26.0 1.0 26 83 Gold Roads GOR Over 3 years to Jun 2016 104.0 6.4 16 37 Total 335 17 20 62

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SLIDE 10

Source: GoldNerds Data Base Nov 2018 *Adj. Excludes Top & Bottom 10%

ASX l SX listed d explorer-held gold r reso sources

$55

are v e valued ed a at an aver erage o e of

Resource Ounce

Moz

3

Is the t thres esho hold d for suc uccess i ss in value creating development

Producer ers v valued ed bet etween een

$150/oz

  • z

$250/oz

  • z &

Producer ers w with less than 1 Moz in resources es are o e often en v valued ed a at ~ ~$55 / resource o e oz

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SLIDE 11

$0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

Dacian Gold Share Price $

Resource M oz Measured M oz Indicated Moz Infererred M oz Share price $

Exploration 3.4 years Feasibility 1.6 years Development 1.25 years Production

71% IRR

Pre-IPO $10m Raised IPO $20m Raised @$0.50 $25m Raised @$0.69 $25m Raised @$2.50 $110m Raised @$2.0 $49m Raised @$2.70

31% IRR

Dacian G Gold b brownfi field r res esource d discovery success, 7 71% I IRR a and f finding costs ts o

  • f $

f $22 p per er o

  • unce

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SLIDE 12

DGO’s investment approach exploits market inefficiencies

Opportunity to reposition market expectations

  • Establishment and communication of a JORC

compliant Exploration Target

  • Longer term exploration planning 2-3 years
  • A comprehensive funding strategy
  • Increased drilling activity
  • Most explorer strategies reflect limited short

term funding and inadequate geological analysis and planning

  • Drilling programmes typically are short term

and sub-optimal for success

  • Explorers are often priced on latest news
  • The market is not transparent
  • There is a no comprehensive broker analysis of

the explorer sector

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SLIDE 13

DGO’s selection p proce cess for brownfields d discovery o

  • pportunities

Process

Selection criteria for ASX listed companies

~90 ASX listed explorers in WA goldfields Assess scale of geological structures and expected cost of discovery

20 long list

7-8 short list

2 invested to date

De Grey Mining Ltd MC $48.3M NTM Gold Ltd MC $12.5M

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SLIDE 14

Investment in De Grey Mining meets our selection criteria

  • Low finding costs

Brownf nfield o d opportuni unity with multiple gold deposits aggregating over 1.39 Mozs of gold1. DGO expects average fin inding c cos

  • sts of
  • f $5-$10 d

$10 dollars per/oz.

  • Scale

DGO sees resource growth potential well a abo bove e 3M

  • unces from depth and strike extensions of existing

resources.

  • Upside optionality

DEG’s land position in the Mallina Shear Zone has over 40 gold g d geochem emical ano nomalies a es along 2 200km of strike with very little drilling below 100 metres.

  • Influential stake

DGO 7% (10% fully diluted); Kirkland Lake Gold 9.% (13% fully diluted).

DEG’s holding of the 200km long Mallina Shear Zone has the potential to become a world class gold province.

DEG’s recent exploration success validates our initial prospectivity analysis: 56m @ 3.0g/t gold from 14m depth

(DEG ASX announcement 15th Oct 2018).

1ASX:DEG Announcement 3rd October 2018

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SLIDE 15

Source: compilation prepared by DGO Expert Research Advisor, Professor Neil Philips *Note all province maps are at the same scale

DGO & De Grey control an emerging world class gold province

Kirkland Lake - Canada 70Moz - 300km Ashanti-Ghana 130Moz – 130km Mallina- WA 1.4Moz – 200km (and growing) Kalgoorlie-WA 80Moz – 100km

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SLIDE 16

DGO h has a a commandi nding ng p position i n in an e emerging ng w world c d class g gold p provinc nce

DGO has 35km’s of prospective shear zones in addition to 7% of De Grey’s 200km’s

Pilbara Gold Province

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SLIDE 17

DEG’s Mallina: Outstanding exploration drill results

Recent exploration success validates our initial prospectivity analysis. Mallina

  • 56m @ 3.0g/t Au from 14m1

Toweranna

  • 7m @ 17.3g/t from 101m2

Withnell

  • 7.97m @ 7.48g/t Au from

137.03m2

Mt Berghaus

  • 26m @ 3.5g/t Au from 3m 2
1ASX:DEG Announcement 15th October 2018 2ASX:DEG Announcement 31st October 2018

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SLIDE 18

Investment in NTM Gold meets our selection criteria

  • Low finding costs

Brownfie ield ld o

  • pportunit

ity and a well positioned gold explorer in WA with 538,000 ounces of gold resources1 already delineated DGO expects average findin ing c costs o

  • f $5

$5-$10 d $10 dolla lars per/oz.

  • Scale

Clear potential for significant resource extensions and additions along its and related gold trends. 100% 100% held ld, 40 40 kilometre p e plus M Mertondale S e Shear ear Z Zone. e.

  • Upside optionality

Excelle llent b brownfie ield ld d discovery potentia ial l with less than 20% of the 40 kilometres of Mertondale Shear Zone being adequately explored.

  • Influential stake

DGO will have a 13% interest in NTM after completing the subscription agreement.

The management and board

  • f NTM are aligned with DGO
  • n how to accelerate the

discovery of substantial resources.

Recent exploration success: 7m @ 4.7 g/t gold from 40 metres to end of hole 2 DGO’s investment will accelerate NTM’s strategically targeted drilling

1ASX:NTM Announcement 13th June 2018 2ASX:NTM Announcement 17th October 2018

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SLIDE 19

NTM Landholdings & drilling coverage

6 operating gold processing plants are located with 50 to 75km’s

Source http://ntmgold.com.au/sites/ntmgold.com.au/files/i/mertondale-shear-zone.png

No effective drilling

250m depth

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SLIDE 20

A portfolio of strategic holdings in ASX listed companies with major brownfield gold discovery and development

  • pportunities

Our vision over 2 to 3 years is to achieve:

Substantial growth in market value and liquidity

1 2

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SLIDE 21

Further significant upside optionality - Strategic land positions

DGO’s strategy is to identify target areas with world class gold discovery potential in Australia. The company holds large strategic land positions in prospective gold and copper terranes:

Pilbara Region, Western Australia

Total landholdings of 3,986 km2 prospective for both structurally controlled and Witwatersrand type sediment hosted gold deposits.

Stuart Shelf and Adelaide Fold Belt, South Australia

Over 759 km2of land holdings hosting targets with a high probability of stratiform copper-cobalt mineralization.

Yerrida Basin, Western Australia

Extensive land holdings of 1,869 km2, hosting multiple gold and copper soil.

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SLIDE 22

DGO’s uses its specialist consultant team to identify target areas with world class gold discovery potential.

Professor Neil Phillips Former Head of Exploration and Mining at CSIRO Distinguished Professor Ross Large University of Tasmania Dr Stuart Bull Expert Sedimentologist

Barry Bourne

Industry Geophysics Expert

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SLIDE 23

DGO DGO’s s inves estmen ent i into DE DEG G and N nd NTM

DGO has eno enormous up s upsi side e potenti tial i in market t capit italis lisatio ion f from its l lev ever eraged ed inves estmen ents i in the brownfiel eld d di disc scover ery s spa pace.

5 10 15 20 25 30 35 40 10 15 20 25 30 35 40 45 50 55 60

DEG Share Price Range in cents Value of DGO’s Investment DEG/DGO Share in Cents

DEG Share Price Impact to DGO Value

2 4 6 8 10 12 14 16 10 20 30 40 50 60 70 80 90

NTM Share Price Range in cents Value of DGO’s Investment in NTM/DGO Share in Cents

NTM Share Price Impact to DGO Value

Note: Valuation of the options held by DGO in DEG and NTM was calculated using the Black-Scholes pricing model

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SLIDE 24

DGO DGO pe peer er compariso sons

DGO has eno enormous up s upsi side e potenti tial i in market t capit italis lisatio ion when n compa pared t ed to peer peers l s land holdi ding ngs

Note: Encounter Resources ASX:ENR; Duketon Mining Ltd ASX:DKM; August 2018.

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DGO ENR DKM Tenements km2 9,882 3,800 1,200 Market Cap $m 16.3 14.7 20.6 EV / km2 - $ 1,028 3,185 12,588

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SLIDE 25

Eduard Eshuys

BSc, FAUSIMM, FAICD

Executive Chairman Bruce Parncutt AO

BSc, MBA

Non-Executive Director Dr Darryl Clark

BSc(Hons), PhD, FAUSIMM, MAICD

Managing Director

Ed is a geologist with five decades of exploration experience in Australia. In the late 1980s and early 1990s he led the teams that discovered Plutonic (+5M ounces), Bronzewing (+3M ounces) and Jundee (+7M ounces), Quarters at Mount Pleasant (+2M ounces) and Rosemont in the Duketon Belt (now +1M ounces), initiated the consolidation of the Mt Pleasant District and the Duketon Belt and led the development and

  • perations of Bronzewing, Jundee and Quarters.

As the Managing Director and CEO of St Barbara Limited from 2004 to 2009 he led the acquisition

  • f the Sons of Gwalia Limited gold assets, and

established resources of +3M ounces and new probable reserves of 1.6M ounces at the Sons of Gwalia Mine. St Barbara Limited grew substantially to become a mid-tier gold producer during that period. Darryl holds a PhD in Economic Geology from the Centre for Ore Deposit Excellence at the University of Tasmania. Darryl has been working as a geologist for over 23 years. He is a highly experienced geologist with a demonstrated track record of leading the exploration divisions of a number of mining houses: Global Geoscience Manager BHPB Exploration; General Manager Exploration Australasia – Vale, Vice President Exploration Cameco Corp. Canada and most recently CEO for Cameco Kazakhstan, Cameco’s investment in the JV Inkai uranium mine. Darryl is currently an independent Non- Executive Director of ASX listed Xanadu Mines.

Lea eader ersh ship T Team

Bruce’s career commenced as a resource analyst and spans over 40 years in financial analysis, merger and acquisition transactions, capital-raisings, and investment in companies across a broad spectrum from early stage to mature public companies. This includes seven years as Chief Executive of leading listed securities firm McIntosh Securities (1990 – 1996) and three years as Senior Vice President

  • f Merrill Lynch (1997 – 1999) following its

successful acquisition of McIntosh Securities in 1996.

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SLIDE 26

Standard di disc sclaimer er

This presentation has been prepared by DGO Gold Limited (DGO). The information contained in this presentation is for informational purposes only and does not constitute an offer to issue, or arrange to issue, securities or other financial products. The information contained in this presentation is not investment or financial product advice and is not intended to be used as the basis for making an investment decision. The presentation has been prepared without taking into account the investment

  • bjectives, financial situation or particular needs of any particular person. No representation or warranty, express or implied, is made as to the fairness, accuracy,

completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none of DGO, its directors, employees or agents, nor any other person accepts any liability, including, without limitation, any liability arising out of fault of negligence, for any loss arising from the use of the information contained in this presentation. In particular, no representation or warranty, express or implied is given as to the accuracy, completeness or correctness, likelihood of achievement or reasonableness or any forecasts, prospects or returns contained in this presentation nor is any obligation assumed to update such information. Such forecasts, prospects or returns are by their nature subject to significant uncertainties and contingencies. No representation is made that, in relation to the tenements the subject of this presentation, DGO has now or will at any time in the future develop further resources or reserves within the meaning of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code). Before making an investment decision, you should consider, with or without the assistance of a financial adviser, whether an investment is appropriate in light of your particular investment needs, objectives and financial circumstances. By accepting this presentation, the recipient represents and warrants that it is a person to whom this presentation may be delivered or distributed without a violation of the laws of any relevant jurisdiction. This presentation is not to be disclosed to any other person or used for any other purpose and any other person who receives this presentation should not rely or act upon it. Information contained in this presentation is confidential information and the property of DGO. It is made available strictly for the purposes referred to above. The presentation and any further confidential information made available to any recipient must be held in complete confidence and documents containing such information may not be reproduced, used or disclosed without the prior written consent of DGO. This presentation must not be disclosed, copied, published, reproduced or distributed in whole or in part at any time without the prior written consent of DGO and by accepting the delivery or making to it of this presentation, the recipient agrees not to do so and to return any written copy of this presentation to DGO at the request of DGO. The Technical Study outcomes and production targets reflected in this presentation are preliminary in nature as conclusions are drawn partly from indicated mineral resources and partly from inferred mineral resources. The Technical Study is based on lower level technical and economic assessments and is insufficient to support estimation of ore reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Technical Study will be realised. There is a low level of geological confidence associated with inferred mineral resources and there is no certainty that further exploration work will result in the determination of indicated mineral resources or that the production target itself will be realised.

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Conta tact

Lev evel el 1 17 41 Exhi hibition Stree eet Melbo bour urne ne V VIC 3 3000 P +61 3 9133 6251 E admin@ n@dg dgogold. d.com.au

www.dgog

  • gol
  • ld.com
  • m.au

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